Chancellor Angela Merkel and Vice Chancellor Sigmar Gabriel have agreed not to implement a capacity market, which would see companies paid to ensure there is enough power generation to meet peak demand, as part of Germany’s transition to renewable energy sources.
Ms. Merkel also opposes subsidiaries for conventional power stations to keep producing electricity during the transition period, Handelsblatt has learned from sources close to the government. There are, however, moves to make an exception for a highly modern gas-fired power plant in power-hungry but green-energy deficient Bavaria.
Germany’s energy transition will see a switch to electricity production mainly from sustainable sources such as wind, solar and biomass. The move is opposed by companies who fear a loss of profit from conventional energy and the closure of power plants; politicians concerned about job losses and critics say conventional energy will be needed as a backup to ensure reliability of supply.
Ms. Merkel was already skeptical about the possibility of a capacity market at the start of the year but had not yet stated whether she would oppose it politically.